AboutJohn Stancil, CPA Expertise I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Society of Tax Professionals, and the Institute of Management Accountants.
Experience I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper.
Expert: John Stancil, CPA Date: 7/12/2008 Subject: Contractor Per Diem
Question QUESTION: I am currently living in upstate NY working a full time perm. job. I have been offered a temp (6-8 months) contract (W2) position. I would work for the recruiting company and be contracted to work for another company. The job will require me to work 2mo in florida and 6mo in long island then 2mo in florida however they say they will pay me per diem (tax free) for each day worked. I received the paperwork and am confused because they ask for my perm. address and place of business.
My perm address will remain in upstate NY, but since I will be quitting my job to take this contract job, I'm not sure what I should put as my "place of business" will be. After this temp position I plan to find another job, possibly elsewhere, but I would not move til then. Shouuld I enter my home as my "place of business"? I may not be doing any actual work at my current address since I am considered to be on travel 100% of the time. At the conclusion of that period in long island, I have the option to work in florida or back at home remotely.
Also, they say they will only pay for days worked, so weekends are not included. Can I additionally deduct those lodging and M&I expenses?
ANSWER: Mike,
Thanks for your question.
If you do not put your permanent address as your place of business, the per diem amounts will be taxable, as you will not appear to be traveling from the IRS view.
As far as the additional days are concerned, you can deduct those expenses.
Hope this helps.
John Stancil, CPA
---------- FOLLOW-UP ----------
QUESTION: Thanks. Can you describe how I determine where my "place of business is?"
I'm currently working a full time perm. job, so right now is my "place of business" my perm. address or the address of my company where my office is?
If I quit this job and take the temp job and list my perm address as my "place of business", do I need to do something to establish a business (such as setup a LLC or something like that? Or am I able to consider it my "place of business" because that is where my perm. residence is?
Thanks
Answer There are a number of factors that determine your place of business. For your temp job, if you are a contract employee, you should list your permanent address as your place of business. You will not need to do anything, other than set up a sole proprietorship and file a Schedule C.
You state that you will receive a W-2. If that is the case, you will not be a contract employee, but a regular employee and your place of business would most likely be your employer's address unless you could demonstrate otherwise.
